Where Will the U.S. Get Its Electricity in 2034?

Cleaner coal, nuclear, solar, wind: these are some of the options for power generation to feed the U.S.'s electric power requirements. That need is expected to grow by 30 percent during the next 25 years, according to the Energy Information Administration, even with a slew of energy-efficiency measures and improvements to the grid infrastructure that delivers the electricity. But the primary source of electricity in 2034, according to a new projection from consulting firm Black & Veatch, will be natural gas. It is the fossil fuel with the least greenhouse gas impact on the atmosphere—burning it releases 43 percent less CO2 than burning coal—and looks set to increase its share of the electricity market, even with looming regulations to restrain climate-changing emissions. And there's this boost, too: new, vast reserves of natural gas found in places like the Marcellus Shale Formation, which stretches from West Virginia to New York State.

By 2034, according to Black & Veatch, nearly half of U.S. electricity will come from natural gas combustion turbines or combined-cycle units, whereas conventional coal-fired generation will shrink to just 23 percent (although few of the power plants will be shut down). Nuclear will grow to provide nearly 150,000 megawatts of electricity as renewables jump from just 54,000 megawatts today (excluding hydroelectric dams) to more than 165,000 megawatts in 2034.

Mark Griffith, head of Black & Veatch's power market analysis, spoke with ScientificAmerican.com about the U.S. electric grid's future configuration of energy sources.

[An edited transcript of the interview follows.]

You recently released a survey of electric utility CEOs. What did you find?
It's a very interesting survey. On the one hand, it illustrates there is a wide range of opinion in utilities on what needs to be done. Some people are skeptical of the need for carbon legislation and others think it's very important. Looking at the survey and what's going on in the industry, regardless of people's personal or political opinions they want to move towards a lower carbon footprint for the power sector. A lack of legislation right now in some corners creates more concern. It's hard to plan for the future if you don't know what that future is from a regulatory standpoint. Assuming something does happen, the survey supports the concept that utilities see nuclear as a reliable green technology, quite different from what people would have thought 10 years ago. Nuclear has been recast, at least that's how industry is looking at it.

Is there a future for coal?
There still seems to be a lot of interest in coal-fired generation for some time frame. Is there a future for coal? Overall, the answer is yes. We still have a certain amount of reliance on coal for a fairly long period of time in our baseline view of how things would unfold. How is that is possible—even with Waxman–Markey type legislation [the pending American Clean Energy and Security Act passed by the House] in place, which is what we assume in our baseline? By 2014, [under that legislation] there are standards you have to start meeting and they get stricter over time…. The concept of compliance is melded with the availability of offsets [reductions of greenhouse emissions elsewhere, such as trees in Alaska that are not cut down could count against coal-fired power plant emissions in Alabama] that are allowed for in the legislation. There is a presumption that all sectors including the electric utility industry will have access to some global market of offsets and can utilize them at some cost to them. That allows for compliance as the rules get tighter. You don't just make a fall-off–the-cliff type of change in year one of legislation like that. It is structured to allow for transition, some of that is in allocation of allowances in the early years…. It pushes you into a world of utilities needing to get in line with really reducing carbon emissions out in [the] 2030s rather than sooner. You don't have to shut down all the coal plants tomorrow. You can have a long-term strategy relying on reasonably priced offsets. With a bill like Waxman–Markey it's not this terrible thing that would force people to change behavior dramatically quickly. It does force behavior change, but it's more phased in over time.

You predict a big switch from coal to natural gas going forward, however. Why?
Even with demand-side management and energy efficiency, we still expect some growth in electricity demand. There's still a need for that type of dispatchable [sic] thermal [heat-producing] resource. Natural gas is the best candidate remaining.

That trend [of switching from coal to natural gas, which already exists] continues even with a moderate level of carbon emission prices. The natural gas stays as a competitive fuel. You're not going to build more conventional coal-fired power plants. We're at the tail end of the [coal] building cycle of what's going on now—and that's pretty much the end of that. You're waiting for a breakthrough on carbon capture and storage and, when that happens, then you could resume on coal. If not, I don’t think we'll build anymore.

As carbon prices go up, it starts to become cost effective to back down less efficient coal units or higher-delivered-cost coal and run gas units more…. Gas is taking on a more significant energy role. You already have gas base load power plants [which provide a continuous supply of electricity] in the west. It's a bigger shift in the east, where there's been more reliance on coal-fired capacity. You get out to 2040–2050, you are retiring a lot of the coal fleet at some point. To the extent that you're still relying on thermal generation, you're relying on natural gas.

Do we have enough natural gas to meet that demand?
We're assuming that issues related to gas shales, environmental issues about groundwater, and the [general] use of water get solved. Those look like solvable issues that don't take a technological breakthrough. It's an expense that's incurred. I don't see gas shales having an insurmountable environmental problem that is expensive to fix. Of course, there are the unknown unknowns—you don't know. But there's certainly nothing that would indicate that…concerns…today for Marcellus and other [natural gas sites] will stop the development of gas shales. There's more and more capital flowing into that [because] it does take a lot of capital investment. Gas-shale wells produce quickly and die young. You have to keep on drilling.

What about nuclear?
Nuclear is something that utilities have just been avoiding because of the perception of the political unacceptability of it and the relatively high capital cost. If you can build a coal plant why would you bother to build a nuclear plant in the U.S.? It's the easier solution to do.

The loan guarantee program seems to be essential, given the magnitude of investment in a single one- or two-unit plant relative to the market capitalization of the companies that would own them. It's low cost relative to the amount of money [the government is] providing. A further expansion of the loan guarantee program seems the best way to encourage new nuclear. [But] you would expect there to be a lot of resistance—a wave of resistance to nuclear plants—just as there is currently resistance to coal plants. That battle is yet to come…. Can you even get another 200,000 megawatts of nuclear plants?
And renewables? Under your forecast, they grow from 5 percent of electricity supply to 13 percent, excluding hydropower. What makes that up?
It's primarily wind. That's the lion's share of it. There's a little geothermal in there and a little solar. There's been a lot of advancements in thin-film technology but the balance of [a solar power] plant [all the materials other than the photovoltaic cells themselves] is not getting any cheaper. The [solar] cells are getting cheaper, and it's not at all clear where the bottom for that is. I think there's some validity to the arguments made by folks from the [information technology] sector that say, look at the advances we've had. We've had the transistor, integrated circuits. It does look like there's some significant room for improvement [in photovoltaics] and it will have more dramatic advances than in coal or any thermal technology, which is already pushing against its theoretical limits. Eventually [photovoltaics] is going to break through. Solar is still kind of expensive as any utilities soliciting bids for renewables will tell you. It's not cheap yet.
Does that mean there will be more storage of electricity?
We don't have a lot in the baseline view. We haven't seen the economics of that pan out yet…. It's really hard to generate storage other than batteries, which are kind of expensive. It's really hard to generate the cost of pumped-hydro or compressed-air storage. Every situation for that is so unique. Some can come through but, bluntly, it's been difficult for new storage other than some isolated demonstrations.

Do your predictions for the electricity generation mix put us on a path to reduce greenhouse gas emissions by 80 percent by 2050, as President Obama has called for?
It does not get us halfway there. [But] once again, it gets back to the amount of offsets that are available. This is an industry emitting 2.5 billion tons per year and would like to get down to 500 million to be in compliance. So are there two billion tons of offsets floating around? There's a lot of slop in the offset number. But you can pick up 500 million [in] offsets and have a decent build out of natural gas. Nuclear could fill a good piece of that role. There's a lot of uncertainty out there.

So what is Black & Veatch actually building today for clients?
We do a lot of things: coal overseas; we do a lot of work in water; gas plants; wind and renewables in general; biomass. We're doing a portfolio of different things…. New construction is going to be renewables or gas for us right now—if it's domestic.